As most Americans in Canada know, it can be hard to find people to file our taxes north of the border – and expensive. Due to fairly recent changes it’s hard to keep up sometimes with what we should be doing to our money. The rationale of this statement was rooted in the fact that I am an American citizen (dual, actually) and attempts to work around all the different IRS reporting rules to file compliantly (and cheaply) in the future. Turns out mutual funds are actually to be reported differently than individual stocks and bonds help in a trading account and unrealized gains don’t remain so for mutual fund reporting. Further, interest must be declared on any foreign-owned bank accounts (so much for interest free savings, TFSA!), and as a consequence any gains occurred within your TFSA must be declared.
After telling me what I did wrong, he did provide a solution for me however, and that was to stick to the RRSP. Max it out, as it is much more advantageous for your tax-savings to use theis as your primary savings vehicle.
For those not in the know, the primary difference of value between my service provider and an accountant is the financial planning and tax advice that comes with an accountant (as opposed to simply filing your return). I was interested to hear some advice, surprisingly, at my last visit to H&R Block – further educating me on the world of personal finance.
Guess I’m glad I caught this now rather than later, eh?